17 March 2006
The Treasury's public sector pay committee has created a 'tension' between ministers' policy of local pay flexibility and the chancellor's requirement that all major remuneration decisions must pass through the committee, an authoritative study is set to reveal.
An analysis of public sector pay, due to be published by the independent Incomes Data Services on March 20, questions the establishment of tighter Treasury controls over pay deals. Ministers have claimed that more flexibility was needed to help regional regeneration.
The IDS report, regarded as the most comprehensive annual assessment of the sector's pay trends, asserts that despite ministers' claims, for the past two years 'the government has been seeking to exercise more control over public sector pay rises, in part to offset the impact of pay modernisation'.
Pay in the public services 2006 suggests that the PSPC gateway – set up by the Treasury last year to control long-term costs – would 'mean a tighter regime of low-cost increases and a further slowing of the whole negotiation procedure'.
That news was greeted apprehensively by the Public and Commercial Services union, which represents 320,000 civil servants.
The PCS has long complained about the time it takes to negotiate Whitehall pay deals because staff are often forced to wait for backdated payments when deadlines are extended for agreements to be made. The union also opposes Treasury plans to further regionalise deals.
Mark Serwotka, PCS general secretary, told Public Finance: 'We already have the farce of more than 200 different sets of pay negotiations in the civil service each of which the Treasury ultimately have to give the green light to. This is not only inefficient but also leads to pay inequality.'
Several 2005 pay deals were stymied by delays – and Whitehall sources this week suggested the fledgling PSPC, which scrutinises the written evidence submitted to departmental review bodies, was at fault.
Alistair Hatchett, head of pay and human resources at IDS, said: 'There has often been frustration expressed by HR managers in the civil service that the time taken to get their pay remits approved by the Treasury has been too long.
'There has also been a tension between delegated bargaining and central control… That could now be exacerbated, given that the government's policy for more local pay flexibility runs counter to a widening of the vetting procedure.'
PFmar2006
